Okay, alot of people here are really off the mark when it comes to compatibility issues among the hardware (and on recommending Vista...don't even bother ATM).
I'm going to use TigerDirect as my recommended supplier since you are in Ontario, but I do use MemEx here in Calgary (usually, they can be jerks for certain return items and charge too much for Video Cards)
PSU -
Ultra X-Finity 600watt - 93.99 - Good little PSU, 600watts leaves lots of upgrade room
Motherboard -
ECS nForce 570 SLIT-A - $119.95 - Great mobo, upgradable, good price
RAM -
OCZ XTC Dual Channel DDR2 2GB Gold Edition - $199.99 - Excellent RAM, good for entertainment, multitasking AND gaming!
GFX Card -
XFX GeForce 7900 GS Extreme 256MB - $219.99 - Fantastic GFX card, very OCable, and will last a long time
HDD-
Seagate 320GB 7200RPM SATAII - $109.99 - Very workable HDD
Monitor -
Acer AL2216WBD 22" WS 5ms 1000:1 contrast - $299.99 - Good speed (for gaming/video) good contrast, good price for a 22"
CPU -
Intel Core 2 Duo E6400 @ 2.13 GHz - $299.99 - Best CPU series on the market Hands down
Assorted peripherals (Keyboard, mouse, DVI cable for the monitor) - ~$100
TOTAL PRICE -
~$1550 CDN
You can lower the price by sacrificing for a small monitor or a lesser GFX card, but I wouldn't recommend either